Farmland rental rates are not expected to change much in 2019. A new forecast by Farmers National Company predicts cash rental rates for 2019 to stay the same as 2018, for the most part.
The company notes that despite current low grain prices, many farmers had the opportunity to forward price corn and soybeans at similar or better prices than last year. Also, the company says the soybean tariff payment will help offset some of the price decline. Good yields in many regions, according to the report, will help stabilize gross revenue for farmers, and most farmers do not like to give up acres that they are farming, which leads them to maintain rents to keep the lease another year.
Incomes for landowners have come down since the peak several years ago, and now they are looking for stability or an increase in the coming seasons. Landowners’ farm incomes have been squeezed in some states by increasing property tax rates that put pressure on maintaining rental rates.
In the end, the return on investment for farmland owners hopefully has bottomed out as interest rates have started to climb.
Source: National Association of Farm Broadcasting News Service.